TaxTMI 
TaxTMI 
2022 (10) TMI 980
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....in dispensaries for free distribution of medicine and treatment of poor patients , to set up and operate hospitals, nursing homes and to render medical aid to poor and deserving patients. During the year, AO notes that the assessee has distributed/donated medicines of Rs. 3,84,55,428/- and accordingly he called upon the assessee trust to prove and justify the said distribution of free medicines. The assessee vide written submission dated 10.08.2016 provided the list of medicines which were distributed. In the said submission, the assessee submitted that it used to receive requests from various social organizations for free medicines which are also engaged in providing help to the poor and needy public. In October, 2013, the assessee received such requests from some social organizations located in Purba Medinipur district for free distribution of medicines to the affected people as the Medinipur Dist was worse affected by heavy rainfall and resultant floods. The assessee submitted that due to excessive rain fall in that district, the entire area remained inundated for a long time which resulted into several water borne diseases and their spread in that area. The assessee submitted t....
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.... with submission of the appellant. The appellant had no evidences in respect of distribution of medicines had been submitted in respect of distribution of medicines through various organizations as claimed by the appellant trust during the course of hearing and appeal proceedings. The appellant trust had completely failed to discharge the onus in respect of claim of expenditure in respect of the distribution of medicines. The appellant was given plenty opportunity to controvert the finding of the AO. The appellant did not bring any confirmatory letter from the club in respect of receipt of medicine. Neither it produced them as his witness. No doctors confirmation was submitted regarding visiting of camps and identity of the patients. No patient's register of the camp was produced. In distribution of medicine in such health camp, there is responsibility of doctors in case of 'reaction of medicine', follow up treatment is also required. No register was produced which can prove identity of the patients who received the benefits. Normally the VANS are accompanied by the doctors. As per MCI norms and public health and safety rules, the medicine can prescribed to the persons only by regi....
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....to give clarificatory letter or retracting letter of the aforesaid club members and further circumstantial evidences which may suggest the distribution of medicines. But, it was not done by the appellant. As regards the claim that purchases has not been doubted, therefore, expenses has to be allowed, this claim is also not sustainable because the utilization of the medicines has not been proved under the head which was claimed by the appellant. The appellant can return these medicines, can sale out of book, can sale to the patients or can do whatever can be done out of books. Once, the appellant has claimed that it has used for the purpose of free distribution then the proving uses of such medicines was the onus of the appellant which the appellant failed to do so. As regards the claim made by the appellant for photography of the camp is concerned, it is seen that the appellant has distributed blankets and polythene. The camp can be made for health check-up or general medical awareness purpose. Simplygiving photographs does not become evidence of venue, place and distribution of medicines particularly when the District Collector has confirmed that there was no suc....
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....trust could not be doubted. The Ld. A.R also referred to the notices issued u/s 133(6) of the Act to these medicines suppliers who have confirmed to have supplied medicines to the assessee. The AR also referred to the statement of Dr. Chatterjee on 01.12.2016 recorded by the AO wherein he stated that he associated with Anandalok Hospital as resident medical officer since 1997 but due to personal issues, he left Anandalok in March 2013 and again joined in July 2015 and so he did not attend any medical camp for Anandalok and submitted that the said statement was recorded under duress and undue pressure. The ld AR then referred to second statement recorded on 25.02.2014 in the remand proceedings of Dr. T. N. Chatterjee u/s 131 of the Act wherein he stated that he was associated since 1997 and was getting contractual fee of Rs. 1,00,000/- per month and in March 2014 on request of other doctors and staff members of the hospital, he verified the medical equipments lying inside of hospital premises and advised the Managing Trustee Mr. Deo Kumar Saraf to discard the old machine/equipment. The ld AR thus contended that there is conflict in the statement given by Dr. T.N. Chatterjee as in th....
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....he Ld. CIT(A). The Ld. D.R submitted that mere submission of photographs of the medical camps would not be suffice. The Ld. D.R. also drew our attention to the findings of AO as well as Ld. CIT(A) that there was no flood in that area and therefore on this count alone the order of Ld. CIT(A) may kindly be upheld as these expenses could not be explained by the assessee with relevant evidences of having distributed/donated the medicines as claimed by the assesse. 7. In this rebuttal the Ld. A.R. referred to the flood report brought out by the Govt. of West Bengal which confirmed that the district of Midnapore was flooded as the river Kalighai and its tributaries namely Kapaleswari and Chandia were flooded due to excessive rain fall and during flood, the water level has crossed EDL eight times at Bakhrabad (Poktapol), five times at Dehati and therefore the authorities below have failed to appreciate the facts on record correctly and finally prayed that the order of Ld. CIT(A) may kindly be set aside and the AO may be directed to delete the disallowance. 8. We have heard rival submissions and perused the material on record including the impugned order of Ld. CIT(A) and Annual Floo....
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....ain joined in July 2015 and so he did not attend any medical camps for Anandalok. However on 25.02.2014 in the remand proceedings, Dr. T. N. Chatterjee was again recorded u/s 131 of the Act wherein he stated that on his recommendation , the assessee trust scrapped assets worth Rs. 17,32,99,000/-which were not usable / or obsolete. He stated that he was associated since 1997 and was getting contractual fee of Rs. 1,00,000/- per month and in March 2014 on request of other doctors and staff members of the hospital, he verified the medical equipments lying inside of hospital premises and advised the Managing Trustee Mr. Deo Kumar Saraf to discard the old machines/equipments. We note that there is conflict in the statement by Dr. T.N. Chatterjee as in the statement recorded on 01.12.2016 he stated that he left the hospital in March 2013 and again joined in July, 2015 whereas in the statement recorded in the remand proceedings on 02.05.2018 Dr. Chatterjee stated that he was working in the hospital since 1997 and in March 2014, he stated that on request of doctors and staff member of Anandalok Hospital certain equipments / marchinaries which were obsolete and outdated ,he recommended the ....
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....ime of purchase and he accordingly added this amount to the income of the assessee. 11. In the appellate proceedings, the Ld. CIT(A) partly allowed the appeal of the assesse by observing and holding as under: "4.4.8. I have perused the fact submitted by the appellant. The appellant trust had again reiterated that the appellant trust has been acquiring assets since inception of the trust for carrying out of medical activities. The original cost of the assets which had been written of were forming part of the block of assets and most of the assets written off had been become dilapidated and were not usable owing to change in technology and efflux of time. It can be seen that the written down value of such assets would have been substantially low. However, the actual date of acquisition of such assets is from time to time and all were forming part of the cost of assets as on 31.03.2007 as claimed by the appellant. The actual cost of the block of which these assets formed a part as per records available were as follows: Particulars 31.03.2003 31.03.2004 31.03.2005 31.03.2006 31.03.2007 Cardiac Cathersation& bypass Surgery 477,44,089 477,44,089 ....
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....e presence of such evidences. From the submission of the appellant and observation of the AO and the details submitted during the course of appellate proceedings it is seen that the appellant had claimed sale of assets of Rs. 17,32,99,000/- which was its original value. Considering the claim of the appellant and submission made it is transpired that these assets were purchased prior to 2007 and up to year of assessment in question the same had lost its utility value. The appellant formed committee and decided to dispose off these unused assets and accordingly its proposal was came into effect and sale was made which gross value up to 2007 (are the actual cost) was ascertained at Rs. 17,32,99,000/-. The appellant claimed that it haddisposed off with the help of 2 employees. But the value of disposed of stock was taken at Rs.85,000/- only and which was also not shown in the books of accounts. The AO treated entire value of assets as sale. In this regard there are 2 issues - (1) whether the asset was existing at all and whether it was genuinely purchased by the appellant and whether it was sold at appropriate value or not. As regards the existence of asset is concerned the af....
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.... was part of the assets acquired from time to time. In the instant case the actual cost of the asset cannot be assessed as income of the Trust as the same had been acquired long time back and had been used for the operations of the Trust. The same had been disposed off as scrap and only the sale proceeds of such scrap can be treated as income. The appellant has not submitted any valuation of scrap goods nor the sales was proved. No details regarding sale has been submitted. Therefore the scrap value of such machines is not acceptable and applying the rate of 5% as per Schedule II of Companies Act, 2015 which provides support for residual value of an asset , addition on this account should be restricted to 5% of the asset written off i.e. Rs. 86,64,950/- in respect of such scrap value. Remaining addition is hereby deleted .The ground of appeal is partly allowed." 12. We have heard rival submissions and perused the material on record including the statements recorded u/s 131 of the Act of two employees Shri Sudam Maity and Bhavesh Jha of the assessee charitable trust during the course of remand proceedings. Undisputedly the assesse trust discarded/disposed off the obsolete, out of....